Section 1
Taxable Transaction
Paragraph (a)
Subparagraph (a)(i)
Cases
British Columbia v. 1084204 B.C. Ltd., 2025 BCCA 110
The respondent (“108”) was a BC company whose shareholder was a foreign national (Mr. Oeri), so that 108 was a “foreign corporation” for purposes of the Property Transfer Tax Act (BC) (the “PTTA).
The chambers judge had found that an acquisition of a BC residential property by 108 was not subject to the additional transfer tax (“ATT”) of 20% imposed under the PTTA for acquisitions of such a property by certain foreign entities such as a foreign corporation because inter alia 108 acquired the property as agent for the common law spouse of Mr. Oeri (Ms. Sui), who was a Canadian permanent resident.
In reversing this finding and concluding that the purchase was subject to the ATT, Horsman JA referred (at para.46) to prior BC cases that “establish that, subject to statutory exemptions, property transfer tax is payable by the person to whom the legal estate is transferred (the 'transferee'), regardless of whether another person has beneficial ownership” and concluded (at para. 50):
Regardless of whether 108’s relationship with Ms. Sui could be characterized as an agency or a trust, or both, 108’s liability to pay the ATT arose on the registration of the transfer of the legal estate to 108.
Section 2.02
Subsection 2.02(5)
Paragraph 2.02(5)(a)
Cases
Chuang v. British Columbia, 2026 BCCA 10
The petitioners, Ms. Hsia, a Canadian citizen, and her fiancé, Mr. Chuang, a foreign national, bought a residential property in a “specified area” (i.e., subject to the foreign buyer’s tax) of British Columbia. Mr. Chuang contributed 40% of the purchase price but registered a 5% interest on title, while Ms. Hsia registered the remaining 95% interest and her mother contributed 60% of the purchase price.
The additional transfer tax (“ATT”) imposed pursuant to the Property Transfer Tax Act (B.C.) (the “PTTA”) was paid based on 5% of the declared fair market value of the property. The Chambers Judge concluded that, by operation of law (i.e., resulting trust), Ms. Hsia held a substantial portion of her registered 95% interest in trust for Mr. Chuang.
On this basis, Fleming, J.A. concluded that ATT had been correctly assessed on the FMV of the property. In particular:
- the purchase of the residential property was a “taxable transfer”, i.e., a transfer subject to the general PTTA property tax;
- Ms. Hsia was a “taxable trustee” under the s. 2.01 definition, i.e., although she was not a foreign entity herself, she was the trustee of a resulting trust for a “foreign entity” (Mr. Chuang), who held a beneficial interest in the residential property to which the taxable transaction related; and
- accordingly, s. 2.02(5)(a) applied, which provided that the ATT was to be calculated on the (total) transaction FMV where each transferee was a foreign entity or a taxable trustee.
Fleming, J.A., indicated (at para. 57) that thus the “legislature expressly contemplates a Canadian transferee being liable for the additional transfer tax as a taxable trustee”, i.e., “the definition of a ‘taxable trustee’ captures both a foreign entity and a Canadian entity holding some interest in property in trust for a foreign entity” and (at para. 58) that, thus, “the taxable trustee provisions … target foreign beneficial interests as well as interests reflected on registered title.”
Fleming, J.A., further stated (at para. 71):
As the Province argues, interpreting the ATT as applying to a taxable trustee’s registered interest, which is plain from the land title registration, achieves fairness for the taxpayer by providing clarity and consistency. In contrast, uncertainty, inefficiency and the potential for inconsistency would result if ATT could only be levied on the portion of the taxable trustee’s interest held in trust for a foreign beneficiary, because the beneficiary’s interest would have to be determined in each case based on additional information provided by the taxpayer.